The disappearance of Madeleine McCann from an Algarve holiday resort in 2007 is still affecting demand for holidays in Portugal, according to Thomas Cook.

Thomas Cook, Europe’s second largest travel company, revealed yesterday that package holiday bookings to Portugal are down by 30 per cent for this summer. Spain is also down 20 per cent and Italy by 35 per cent.

The company says the unfavourable euro exchange rate and rising unemployment are to blame for the picture across western Europe.

But Cooks says the disappearance of the British three-year-old from the Ocean Club in Praia da Luz in May 2007 is also still a factor when families think about holidaying in Portugal. “It is such as strong family destination,” said group chief executive Manny Fontenla-Novoa.

He added that the Portuguese tourist board had done what it could to boost visitor numbers. “Anything more would be insensitive,” he said. “Portugal has been down for two or three year, but it will come back,” he added.

Fontenla-Novoa was speaking at his company’s annual holiday forecast. He said that while Portugal and Spain are less popular, Turkey is up - not just because it is outside the euro-zone. The all-inclusive resorts are cheaper owing to lower staff and running costs and have more facilities because the properties are larger.

“You are always going to get some destinations that are difficult to shift… Spain and Portugal will be difficult to shift – mainland Spain and Canaries in particular – but the Balearics are doing well,” said Fontenla-Novoa.

His findings are supported by statistics released today by Cheapflights.co.uk, which found online searches for tickets to Tenerife are down 45 per cent and Lanzarote is down 18 per cent.

Likewise, Skyscanner.net says interest in Turkey is booming – the flights search website claims it had its busiest day for searches on Monday and says interest in Dalaman, Turkey is up 160 per cent on last year, while Bodrum is up 153 per cent.

Despite the collapse in bookings to Portugal and Spain, Britons holding out for cut-price package holidays will be sorely disappointed.

“We have not got any discounting or deals coming up,” said Fontenla-Novoa.

“Turkey will fill up first then we will get more bookings for Spain but Spain will not be cheaper than Turkey… we won’t try and stimulate Spain with cheap prices – it doesn’t work.”

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